Brussels 30 August : “Skyrocketing” costs for energy highlight the limitations of the European Union’s (EU) electricity market structure, European Commission President Ursula von der Leyen told reporters while making announcements about structural reform.
The market “was created in completely different circumstances” Von der Leyen said on Monday.
“That’s why we as the commission are currently conducting an emergency intervention as well as an overhaul of the structure of the market for electricity,” she said, without providing details on the changes being considered.
The EU has been grappling with the rising cost of energy over the last 6 months in the aftermath of the Russian invasion of Ukraine.
An emergency session of EU ministers of energy is scheduled to take place on 9 September.
The prices of electricity in the European market are determined by the costliest energy source in production, which is currently gas-fired power plants.
In the midst of the Ukraine conflict, wholesale gas prices soared and resulted in higher electricity costs.
Reforms of the European electricity market could alter the merit order mechanism , allowing consumers to pay lower prices for electricity produced with wind and solar energy.
German Economy Minister Robert Habeck also recently announced market reforms that will separate customer electric prices from the increasing cost of gas.
Applauding EU efforts to stop a persistent dependence on Russian fossil fuels Von der Leyen warned against forming a new dependence on China for strategic raw materials such as Lithium for battery production.
“Out of the 30 critical raw materials that are used today 10 of them are sourced from China.Therefore, we must avoid getting into the same dependence as with gas and oil,” von der Leyen said.
